Attendance Question

[jasonxctf]

so here's my question/comment.

 

i constantly remember hearing from KW that any increase in attendance would equal an increase in payroll.

 

in 2003 attendance was up 15% from 2002. (1,939,524 in '03 vs 1,676,911 in '02)

 

at the same point, the Sox have sold the naming rights of the stadium as another revenue stream. I understand that this revenue is for ballpark improvements but I can't help but believe that some of that could go to general payroll.

 

so my question is.. with an increase in attendance, extra money coming in from naming rights, in addition to any additional income from the All-Star Game... why are we looking to cut payroll?

[mreye]

All the money from the naming rights is to go to renovations - It's in the contract.

[RibbieRubarb]

Payroll will be increased.

From $51 Million to $55 Million..

 

[jasonxctf]

if it was $51m before 15% higher would be $58.5m correct?

 

did we not cover all of Colon's contract last year?

[cwsox]

I understand that this revenue is for ballpark improvements but I can't help but believe that some of that could go to general payroll.

It absolutely cannot.

 

The naming rights is a contractural matter with the Sox and the Illinois Sports Authority and US Cellular.

 

If any of that money from the contract goes to any operating expenses of the Sox, someone goes to jail.

[jasonxctf]

ok.. so here's my follow up question.

 

What would possibly make the WhiteSox increase payroll besides attendance?

 

to be honest I'm tired of being a mid to low-market payroll team.

[cwsox]

ATTENDANCE ATTENDANCE ATTENDANCE

 

 

 

I do my part - I live in Michigan and have seasons tickets

 

 

 

Other revenue streams are the same for any other ball club - broadcast rights, etc. Not sure how the merchandise thing is structured through MLB.

 

But attendance is key - fans have to put their money where their mouths are in regards to increasing payroll, which means, buy tickets.

[Queen Prawn]

But attendance is key - fans have to put their money where their mouths are in regards to increasing payroll, which means, buy tickets.

Make them affordable and you've got a deal. At the prices of things, I am lucky if I can make it 4 times a year any more. I used to go 8-10 a year, but I can't afford that any more. If they raise ticket prices as I have heard, I'll be lucky to make it to 2 games this year (paying off debts from my house and getting a wedding together costs bucks).

[jasonxctf]

the problem i have is that perception is everything.

 

the sox attendance increases 15% last year and all we hear about is KW looking to unload Ordonez, Konerko, Lee and that he can't re-sign Colon, Gordon and others.

 

the perception is that even with the increase in attendance we cant afford to keep some of our best players.

 

true or not true.. that's how I think many Sox fans feel right now.

[runningxc]

Jasonxctf -

 

Deal -- the White Sox have decided they can win with less. It can be done. I.e. Florida Marlins, Oakland A's, Minnesota Twins. Read "Moneyball". Oh wait that makes KW seam like a bumbling Idiot.

[Yossarian]

ATTENDANCE ATTENDANCE ATTENDANCE

 

 

 

I do my part - I live in Michigan and have seasons tickets

 

 

 

Other revenue streams are the same for any other ball club - broadcast rights, etc.  Not sure how the merchandise thing is structured through MLB.

 

But attendance is key - fans have to put their money where their mouths are in regards to increasing payroll, which means, buy tickets.

You're letting the owner off way too easy here. The Sox could draw as well as the Cubs and things would be pretty much the same. JR has said as much on many occasions. He's said that he runs things the way he sees fit, regardless of what the Cubs do, or what the fans think. If the Sox don't field a competitive team in 04, and that is looking more and more likely, then watch attendance plummet. What then?

[cwsox]

the problem i have is that perception is everything.

 

the sox attendance increases 15% last year and all we hear about is KW looking to unload Ordonez, Konerko, Lee and that he can't re-sign Colon, Gordon and others.

 

the perception is that even with the increase in attendance we cant afford to keep some of our best players.

 

true or not true.. that's how I think many Sox fans feel right now.

The perception is:

 

I haven't been hearing volumns about the Sox unloading everyone. I have heard a lot of speculation by fans, but very little out of 35th Street. Tribune articles have pointed out the realities of baseball economics but I haven't heard anything like KW saying "fire sale is on after 15% attendance increase." The only panic is that created on message boards like this when everyone speculates.

 

Another poster says that the Sox could draw like the Cubs and nothing would change. I doubt that highly. That is more unproven speculation whiuch contributes to unfair and faulty perceptions. Last time we had some big attendance years we signed pitchers to long term contracts and Albert belle.

 

Fanof14 my friend - anyone here can sign up for the Silver and Black pack club (fake a kids name if necessary) and for $25 get a nice Sox gift item - last few years, back pack and slide rule - and 6 free tickets. There is Pepsi 1/2 price night. There is Monday 1/2 price night. There is kids $1 on Sunday. There is the Sox 7 plan. There are certainly affordable ways to go out there. I love you fanof14 but I just cannot accept the "its too expensive" argument about not going.

 

What is separating the Sox from other clubs is KW is not a big talker before a deal. Earlier this week Trammel was all over the Detroit papers saying he wants Tejada. My first thought - I hope the Sox are thinking that. My second reaction - is it always to incite fan expectations? If the Tigers do not sign tejada, will they feel really let down? Is Trammel adding to Tejada's asking price? There are multitudes of ways of looking at anything -

 

but I have no use for the "fire sale going on" panic that has no grounds in reality other than the speculation - especially when a lot of that speculation is prefaced is "I heard it on the SCORE" or on ESPN or some other sports show. These people have air time to fill and it is a quiet time so they will say antything to create a little controversy and ratings. Why would anyone belioeve the rantings of any sports show on tv and radio? They are filling air time - not reporting news. Just their own speculations which because they say it on air feeds the power of their speculation but does nothing to make it true what so ever.

[Queen Prawn]

They have been open that they can't afford Flash and Maggs. Maggs has gone from on the block (there have several quotes posted) to secure which means they don't even know what they want to do with him. Konerko, Koch and their ridiculous contracts are being shopped. Colon turned down his contract (not to say he won't be back, one never knows)...

 

Thomas and Valentin are the two of the few that have been tied up, and chances are they are going to try to use Valentin as some sort of trade bait.

 

There has been plenty out of 35th. Then they shoot themselves in the foot any whine that cash is tight. Sorry, but I don't think their fan base wants to hear this after this past season - better attendance, raised ticket and parking prices and rumors (and that's all they are - rumors) of another ticket increase. They need to start doing things to bring the people back, not push more of them away.

 

With all due respect CW, you don't know my financial situation. My mortgage has practically doubled (we added rooms on to our tiny Cape Cod so we can now change our minds without having to go outside - funny part is that doing that still works out to being cheaper than the average home is going for in our area), my sister's baby's dad is a deadbeat so I am helping her raise her kid financially, I still owe 14K in student loans and I am planning a wedding. If you would like to donate to my cause, I'll send you my address and you can send me a check.

[jasonxctf]

i just wish the sox would be pro-active about their financial situation. I would love to hear KW come out and say "With a 15% increase in attendance, we were able to acquire Player X.. without that increase we wouldn't have been able to get him."

 

That in itself would help those Sox fans who feel that management has little care about them feel better about the ballclub and it's direction as a whole.

 

I would love to know how the extra $ I shelled out at the ballgame this year (in ticket prices, parking, concessions, etc) helped to benefit the team in the long run and helped to put a better team out on the field.

 

In fact, I'll go a step farther. I would love for KW to set attendance goals before the year starts. I would love to hear him say, if we get 2mil in fans this year, I will increase the payroll to $65 or 70 mil.

 

That may help attendance late in the year if the Sox fall out of things and help fans feel better about management and the team.

[IlliniBob72]

With all due respect CW, you don't know my financial situation.  My mortgage has practically doubled (we added rooms on to our tiny Cape Cod so we can now change our minds without having to go outside - funny part is that doing that still works out to being cheaper than the average home is going for in our area), my sister's baby's dad is a deadbeat so I am helping her raise her kid financially, I still owe 14K in student loans and I am planning a wedding.  If you would like to donate to my cause, I'll send you my address and you can send me a check.

Well, perhaps you should just say that you can't go then. I sympathize with you for your economic woes. Believe me, I have my own, but going to a baseball game is pretty cheap when compared to other sports and it can certainly be done, as CW showed. Baseball games can be affordable. I'm sorry you can't afford to go, but that really isn't the White Sox's fault.

[IlliniBob72]

They have been open that they can't afford Flash and Maggs.  Maggs has gone from on the block (there have several quotes posted) to secure which means they don't even know what they want to do with him.  Konerko, Koch and their ridiculous contracts are being shopped.  Colon turned down his contract (not to say he won't be back, one never knows)...

Maggs is being shopped, if he in fact is, because he is due to make more money than he is arguably worth. Same goes for Konerko and Koch. He will be traded for value only, not as part of a salary dump. Flash isn't being brought back because he wants more than he's worth. Colon was offered a very fair contract.

 

What you are seeing is going on everywhere. The Red Sox were willing to give Ramirez away for nothing because...he's going to make too much money.

 

If the people come to the park, payroll will likely go up. We can't expect a team in the lower third in attendance to be in the upper third in payroll.

[cwsox]

But could the Sox mabye do another deal, to help payroll??  <clip> but if a deal could go down that could help the payroll by 10, 15 Mil, I dont care if we were the "Playtex Tampon Chicago WhiteSox." But could a deal somewhat go down like that?

Keep thinking of every other possible way for JR to spend millions money without us spending a $20.

 

The solution is, fans have to go to the games.

 

It is attendance, attendance, attendance. Fans got to get off their dead asses and stop dreaming that Tinkerbell will show up with the calvary so fans can sit home and say "spend money, JR."

 

And I for one would really resent any stupid team naming ploy - the example you give, or the the Bears solution, or any other. The stadium was one thing. The team is another.

[YASNY]

Keep thinking of every other possible way for JR to spend millions money without us spending a $20.

 

The solution is, fans have to go to the games.

 

It is attendance, attendance, attendance.  Fans got to get off their dead asses and stop dreaming that Tinkerbell will show up with the calvary so fans can sit home and say "spend money, JR."

 

And I for one would really resent any stupid team naming ploy - the example you give, or the the Bears solution, or any other.    The stadium was one thing.  The team is another.

Taking the past managerial regime into consideration and the pervasive perception that the team played lackluster, uninspired baseball; the Sox have brought back a popular and lively ex-Sox player to manage the team and create a little excitment, or the perception of, around USCF. If, by chance, he can light a fire under some of these guys asses, perhaps there will be an increase in attendance.

[Queen Prawn]

I'm sorry you can't afford to go, but that really isn't the White Sox's fault.

When, exactly, did I say it was their fault?! I was replying to a statement CW made that I could afford to go if I wanted. I go to as many games as I can, which isn't many. I will admit that the ticket and parking increase last year after a crappy season really put me off, but in reality it had little effect on whether I went or not.

[Rex Hudler]

so here's my question/comment.

 

i constantly remember hearing from KW that any increase in attendance would equal an increase in payroll.

 

in 2003 attendance was up 15% from 2002. (1,939,524 in '03 vs 1,676,911 in '02)

 

at the same point, the Sox have sold the naming rights of the stadium as another revenue stream. I understand that this revenue is for ballpark improvements but I can't help but believe that some of that could go to general payroll.

 

so my question is.. with an increase in attendance, extra money coming in from naming rights, in addition to any additional income from the All-Star Game... why are we looking to cut payroll?

Here's the scoop.... some of this may be repeated information, but some of the other posts got off track a bit so I figured I would just answer yours in total, which may mean duplication of some info. The naming rights $$ have been covered, so I won't get into that.

 

The Sox are increasing their payroll this year. No one knows to what exact level. There has been all kids of speculation and numbers thrown out from $55 mil, to $58 mil, to $60 mil or even higher. The final number will likely depend on what players they are able to get and if it makes financial sense.

 

The Sox are trying to move players to give them more flexibility. The Maggs example is if you can get 2, maybe 3 Major League ready players, and save several million which can be spent on other players, you could in theory at least get 4 or 5 players for the price of one. If you are building a team and have limited resources, that gives you much more flexibility.

 

The Sox either can't or don't want to afford Gordon. If Gordon wants $5 million or $10 million or any number that the Sox feel is too high, then refusing to offer him that doesn't make them cheap, it just means they aren't paying that price for something they think is worth less. Don't bring up Jose and his $5 mil, because I am still scratching my head on that one.

 

The bottom line is the Sox are trying to get better, but with Buehrle set to get approximately a raise of $3 million or more, and Maggs due an extra $5 million, and Carlos likely an extra $3 million That's $11 million extra right there, not counting other raises players will get. If the Sox only increase payroll $5-$10 million, then they don't have enough to honor those contracts. Hence, everyone talking about the Sox "cutting" payroll.

 

Lastly, and please don't take this as me talking down to you, but there is a business lesson here that needs to be learned. Just because attendance goes up 15%, doesn't mean payroll should be adjusted accordingly. First of all, announced attendance numbers include comp tickets, so an extra 250,000 fans does not necessarily they all paid or paid full price. That also brings us to the half-price nights and other discount offers that may have caused the attendance to rise. So understand, that increased attendance does not necessarily mean an equal and proportionate increase in revenue.

 

Also, increased revenue does not mean increased profit. Operating expenses have to be considered. Think of it this way... if you go into McDonald's and but a Big Mac for $2.50 (or whatever they cost), only $1.00 (or less) of that may go to the bottom line. There is the cost of the burger, the cost of the employees cooking and serving the burger, the building, the electricity, the lease, maintenance, and so on.

 

This applies to the Sox as well. If ticket revenue increased say $20 million dollars in a year, that does not mean that is $20 million in free money to be added to the payroll. There are expenses to be paid and costs incurred. Yes, some of those costs are fixed and would not go up, but most are variable meaning that as ticket sales rise and the number of people in attendance rise, so do the costs.

 

I wish it were as easy as you stated, but there is much more to it.

[IlliniBob72]

When, exactly, did I say it was their fault?!  I was replying to a statement CW made that I could afford to go if I wanted.  I go to as many games as I can, which isn't many.  I will admit that the ticket and parking increase last year after a crappy season really put me off, but in reality it had little effect on whether I went or not.

Your original statement was...

 

Make them affordable and you've got a deal. At the prices of things, I am lucky if I can make it 4 times a year any more. I used to go 8-10 a year, but I can't afford that any more. If they raise ticket prices as I have heard, I'll be lucky to make it to 2 games this year (paying off debts from my house and getting a wedding together costs bucks).

 

That sounded to me like a complaint that the Sox charge too much. If I am wrong, I apologize. But if I wasn't wrong, my original statement stands. A Chevy Cavalier may be too expensive for a teenager, but as far as cars go, it's not expensive at all. The Sox may be not "affordable" to someone with many other financial obligations, but as far as sports entertainment goes, they aren't that expensive.

[Rex Hudler]

I have a question about the money issues, going back to the first few posts. I totally understand the naming rights and the 63 Mil. going to renovations. But could the Sox mabye do another deal, to help payroll?? Like the Bears have done. BankOne shelled out alot of $$ to be "The Chicago Bears Presented by BankOne,and put there name all over Solider field. Now im not sure if that effects the payroll or not, but if a deal could go down that could help the payroll by 10, 15 Mil, I dont care if we were the "Playtex Tampon Chicago WhiteSox." But could a deal somewhat go down like that?

The concept of a "Presenting Sponsor" is fairly new in sports marketing and many teams are trying it.

 

Personally, I am not a big fan of it and I am not sure how fans would respond. Like your Bears example, it would be a ".... Presented by X Sponsor" rather than a Bank One Chicago Bears.

 

To answer your question, yes it is possible. Strong marketing can be a boost to a club's revenue, but in the grand scheme of things, it is pretty small when related to TV revenue (although that is considered marketing) and ticket sales.

 

The problem, and you can probably guess it, is that the amount of marketing dollars a team can bring in or charge for opportunities is generally set by the attendance. A simple example is that the Cubs (based on $3 million in attendance) can get more money for the same kinds of sponsorships than the Sox can get based on numbers. If you were advertising your business, and you had to choose, would you pick an opportunity that would get you exposure to 3 million people or 2 million if costs and details were the same? If you wanted to do both, would you not expect the opportunity with only 2 million fans to be cheaper?

 

So you can see how increased attendance has a domino effect on revenue streams in addition to tickets.

[Queen Prawn]

That was my suggestion for getting more butts in the seats. That was all.

 

Just because I can't really afford to go to games doesn't mean I don't find other ways to support them. After we got engaged last Friday, we went to Champs and I bought him his engagement present - a throwback Mariners' jersey, hey it's what he wanted. I also bought myself a spring/fall weight Sox jacket - DAMN! I should I have worn it today - perfect weather...